Press Release|Public Finance
KBRA Affirms AAA Rating and Stable Outlook on Dallas Area Rapid Transit’s Senior Lien Sales Tax Revenue Bonds
20 Oct 2023 | New York
KBRA affirms the long-term rating of AAA with a Stable Outlook on Dallas Area Rapid Transit’s Senior Lien Sales Tax Revenue Bonds. The AAA rating affirmation reflects Dallas Area Rapid Transit’s (“DART”) broad sales tax revenue base, a continued favorable pledged revenue trend, strong debt service coverage (DSC) levels, and the underlying strength of the Dallas-Fort Worth Metroplex economy, which has benefited from a diverse base of industries and rapid population growth.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- Strong pledged revenue base that rebounded well from Great Recession and COVID-19 induced declines.
- Sizable, diverse, and growing service area with the nation’s fourth largest metropolitan area.
- ABT requires 2.0x coverage of MADS, thus limiting over-leveraging risk.
Credit Challenges
- Bonds are largely secured by sales taxes, collections of which may at times be adversely affected by economic factors.
Rating Sensitivities
For Upgrade
- Not applicable at AAA rating level.
For Downgrade
- Significant secular economic downturn that results in sharp reductions in pledged sales tax revenue collections.
To access rating and relevant documents, click here.